History of Ford Motor Company - Post-World War II Developments

Post-World War II Developments

In 1943, a despondent Edsel Ford died of stomach cancer. Henry decided then to resume direct control of the company, but this proved a very poor idea as he was 78 years old and suffering from heart problems and atherosclerosis. His mental state was also questionable, and there was a very real possibility that the company would collapse if he died or became incapacitated. The Roosevelt Administration had a contingency plan in place to nationalize Ford if need be so that they wouldn't lose vital military production.

At this point, Ford's wife and daughter-in-law intervened and demanded that he turn control over to his grandson Henry Ford II. They threatened to sell off their stock (amounting to half the company's total shares) if he refused. Henry was infuriated, but there was nothing he could do, and so he gave in. When Henry II, who came to be called affectionately "Hank the Deuce," assumed command, the Company was losing US$9 million a month and in financial chaos.

Henry Ford died of a brain hemorrhage on April 7, 1947. Mourners passed by at a rate of 5,000 each hour at the public viewing on Wednesday of that week at Greenfield Village in Dearborn. The funeral service for Henry Ford was held at the Cathedral Church of St. Paul in Detroit on Thursday April 9, 1947. At the funeral service, 20,000 people stood outside St. Paul's Cathedral in the rain with 600 inside, while the funeral had attracted national attention as an estimated seven million people had mourned his death (according to A&E Biography).

Ernest R. Breech, head of Bendix Aviation, was hired in 1946, and became first Executive Vice President, then Board Chairman in 1955. Henry II served as President from 1945 to 1960, and as Chairman and CEO from 1960 to 1980. In 1956, Ford became a publicly traded corporation. The Ford family maintains about 40% controlling interest in the company, through a series of Special Class B preferred stocks. Also in 1956, following its emphasis on safety improvements in new models, Motor Trend awarded the company its "Car of the Year" award.

In 1946, Robert McNamara joined Ford as manager of planning and financial analysis. He advanced rapidly through a series of top-level management positions to the presidency of Ford on 9 November 1960, one day after John F. Kennedy's election. The first company head selected outside the Ford family, McNamara had gained the favor of Henry Ford II, and had aided in Ford's expansion and success in the postwar period. Less than five weeks after becoming president at Ford, he accepted Kennedy's invitation to join his cabinet, as Secretary of Defense.

Ford introduced the iconic Thunderbird in 1955 and the Edsel brand automobile line in 1958, following a US$250 million dollar research and marketing campaign, which had failed to ask questions crucial for the marque's success. The Edsel was cancelled after less than 27 months in the marketplace in November 1960. The corporation bounced back from the failure of the Edsel by introducing its compact Falcon in 1960 and the Mustang in 1964. By 1967, Ford of Europe was established.

Lee Iacocca was involved with the design of several successful Ford automobiles, most notably the Mustang. He was also the "moving force," as one court put it, behind the notorious Pinto. He promoted other ideas which did not reach the marketplace as Ford products. Eventually, he became the president of the company, but clashed with "Bunkie" Knudsen as well as Henry II and ultimately, on July 13, 1978, he was fired by Henry Ford II, despite the company's having earned a $2.2 billion profit for the year. Chrysler soon hired Iacocca, which he returned to profitability during the 1980s.

In 1942, Elsa Iwanowa, who was then 16-years-old and a resident of Rostok in the Soviet Union, and many other citizens of countries that were occupied by the Wehrmacht were transported in cattle cars to the western part of Germany, where they were displayed to visiting businessmen. From there Iwanowa and others were forced to become slave laborers for Ford's German subsidiary, which had become separated from the Dearborn headquarters as a result of the U.S. declaration of war. "On March 4, 1998, fifty-three years after she was liberated from the German Ford plant, Elsa Iwanowa demanded justice, filing a class-action lawsuit in U.S. District Court against the Ford Motor Company." In court, Ford admitted that Iwanowa and many others like her were "forced to endure a sad and terrible experience"; Ford, however, moved to have the suit dismissed on the grounds that it would be best redressed on "a nation-to-nation, government-to-government" basis. In 1999, the court dismissed Iwanowa's suit. At about the same time, a number of German companies, including GM subsidiary Opel, agreed to contribute $5.1 billion to a fund to compensate the surviving slave laborers. After being the subject of much adverse publicity, Ford, in March 2000, agreed to contribute $13 million to the compensation fund.

In 1979 Philip Caldwell became Chairman, succeeded in 1985 by Donald Petersen. Harold Poling served as Chairman and CEO from 1990 to 1993. Alex Trotman was Chairman and CEO from 1993 to 1998, and Jacques Nasser served at the helm from 1999 to 2001. Henry Ford's great-grandson, William Clay Ford Jr., is the company's current Chairman of the Board and was CEO until September 5, 2006, when he named Alan Mulally from Boeing as his successor. As of 2006, the Ford family owns about 5% of Company shares outstanding.

In December 2006, Ford announced it would mortgage all assets, including factories and equipment, office property, intellectual property (patents and blue oval trademarks), and its stakes in subsidiaries, to raise $23.4 billion in cash. The secured credit line is expected to finance product development during the restructuring through 2009, as the company expects to burn through $17 billion in cash before turning a profit. The action was unprecedented in the company's 103 year history.